Council grants tax abatements for Dow Corning expansion, upgrades

The Midland City Council unanimously approved tax breaks on $7.9 million in Dow Corning Corp. renovations and upgrades to Midland facilities.

Breaks on three separate projects received the council's nod. They are related to upgrades and expansion in several product lines.

"Incentive programs allow us to be economically feasible and allow us to invest in new technology and to modernize our facilities," said Ken Kaufman, Midland site manager for Dow Corning.

Factors such as rising energy costs have contributed to increased costs of doing buisness, he said.

The expansions will help retain up to 29 jobs and create one or two new jobs. They could attract future investments down the line, Kaufman said. The upgrades will improve control systems and air systems in the plant.

One reason the project would retain jobs and not add jobs is that a reactor where chemical processes take place is replaced with a larger reactor, which takes the same number of employees to operate, but increases capacity, Kaufman said.

Upgrades will help make phenyls, paper coatings, co-polymers and several core and intermediate products that are used in house and sold to other manufactures. Some of the core products will relate to the major expansion under way at Hemlock Semiconductor Corp.

Dow Corning will save an estimated $550,000 in taxes over the 12-year life of the tax breaks, city assessor Reid Duford said. The breaks amount to roughly 50 percent, he said.

At the council meeting, Scott Walker, Midland Tomorrow Executive Director, spoke in support of the tax breaks. He gave a presentation showing what spinoff benefits the 30 Dow Corning jobs have.

He said studies show 83 spinoff jobs and $2.4 million are generated locally from the Dow Corning investments.

Plus, considering that Michigan is one of the most expensive states to do business in, local support is important, Walker said. Industrial exemptions are one of the few things controlled locally.

"By granting tax abatements we can directly impact how competitive Midland is with the rest of the country," he said. Continued investment in the Midland site will make it more competitive in today's market, Walker added.

Kaufman expects Dow Corning to bring another plan to city council related to Hemlock Semiconductors expansions.

"I hope to bring projects like that forward in the next few years," he said.